R&D investment reaches 7.2% of revenue in Q1 2026, marking a strategic pivot from IT-centric components to future growth engines

Massive push into ultra-high-voltage MLCCs for EVs, 8MP cameras for autonomous driving, and next-gen FCBGA substrates for AI datacenters

Aggressive R&D Investments Fuel Structural Transformation
SEOUL — Samsung Electro-Mechanics is rapidly accelerating its structural transformation by heavily ramping up research and development (R&D) investments, focusing on high-value-added components for electric vehicles (EVs) and artificial intelligence (AI) servers. The strategic shift signals a deliberate departure from its traditional reliance on smartphone and information technology (IT) components, establishing automotive, server, and high-performance package substrates as its primary future growth engines.

According to industry sources on May 28, the company’s R&D expenditure has risen consistently over the years. Investment grew from 577.1 billion KRW in 2022 to 587.8 billion KRW in 2023, 666.3 billion KRW in 2024, and reached 787.0 billion KRW in 2025—a substantial 36% increase over a three-year period. Reflecting this aggressive push, R&D spending as a percentage of total revenue climbed from 6.1% in 2022 to 7.0% in 2025. This upward trajectory continued into the first quarter of 2026, with R&D execution hitting 231.8 billion KRW, accounting for 7.2% of the quarter's revenue.

Electrification and Autonomous Driving Power Automotive Expansion
The expanded financial commitment is directly translating into breakthroughs in high-value components for the EV market. Samsung Electro-Mechanics has developed ultra-high-voltage Multi-Layer Ceramic Capacitors (MLCCs) in the 1,000V to 1,250V range, designed specifically for onboard charging systems. Furthermore, the company secured a new lineup of 35V mid-voltage MLCCs to address the booming global demand for high-output rapid charging infrastructure. As EV power systems evolve toward higher voltages and greater efficiency, these moves position the firm to capture the surging demand for high-reliability MLCCs.

Simultaneously, the company is reinforcing its automotive camera module technologies aimed at the autonomous driving market. Samsung Electro-Mechanics has established a comprehensive lineup of 8-megapixel (8MP) high-pixel autonomous driving camera modules to proactively respond to the expansion of Advanced Driver Assistance Systems (ADAS). As self-driving capabilities mature, automotive cameras require simultaneous advancements in recognition performance, durability, and reliability, making them a critical high-margin sector.

High-Spec FCBGA Substrates Meet Surging AI Datacenter Demand
In the AI server domain, Flip-Chip Ball Grid Array (FCBGA) substrates have emerged as the central pillar of growth. By developing next-generation FCBGA substrates applied to high-specification server Central Processing Units (CPUs), Samsung Electro-Mechanics is successfully restructuring its substrate business around premium, high-margin products.

The scale of investment in package substrates for AI servers is projected to expand continuously due to a profound supply shortage. Big Tech firms managing massive datacenters are rapidly scaling up their orders, while the increasing complexity and size of high-spec substrates are cannibalizing existing production capacity.

"Due to the skyrocketing demand from Big Tech clients related to datacenters and the capacity cannibalization caused by the high-specification nature of these substrates, our current production capacity is reaching its limits to fully accommodate customer requests." – Kim Pan-bae, Executive Vice President of Package Solution Business Unit
Speaking during the Q1 2026 earnings conference call, Executive Vice President Kim added, "We are actively reviewing further investments to expand the supply of next-generation products for 2027 and beyond. By aggressively responding to the premium package substrate demand from AI datacenters, we plan to consistently scale up the size of our FCBGA business."